Sacramento daily record-union. [volume] (Sacramento [Calif.]) 1875-1891, 1887-11-12
THE RAILROAD DEBT TO THE GOV
EMINENT.

Y.
When the Pacific Railroad bill of 1862
passed the House il provided, in the sixth
section:
That the grants Aforesaid ere made upon con-
dition that the said COMPANY shall keep said
railroad and telegraph line in repair and use,
and shall ct all times ira smit dispatches over
said telegraph line, and transport mails, troops
and munitions of war, Supplies aid public
stores, upon said railroad fer the Government,
whenever required to do so by any department
thereof, and that the Government shall at all
times have the preference in the use of the same
Tor all the purposes aforesaid lat fair and rea-
sonable rates of compensation, not to exceed
the amounts paid by private parties for the
same kind oil seryicel, aud all compe nsation for
services rendered for the Government shall be
applied to the payment of said bonds and inter
est until the whole amount is fully paid Said
company may also pay the United States. wholly
or in part, in the same or other bonds, Treasury
notes, or other evidence OF debt against the
United States, to be allowed at par. And after
said road is completed, until said bonds and in
terest are paid, at feast per cent of the net
earnings of said road shall lie annually applied
10 the payment thereof.
In the section Immediately preceding il
was provided, among other things, that the
Government should have lien on the
road, III the nature of first mortgage, L" to
secure the repayment to the United States,
as hereinafter provided. of the amount of
said bonds, etc. and in case of failure to
redeem said bonds or any part of them,
uhen required TO do so ly the Secretary of
the Treasury IN accordance Nth the pro
visions Of this act. the said road, etc, shall
at once vest in the United States" etc.
The obvious effect of these two sections
was to provide for payment only by the
means specified III the sixth section. that is
to say, by transportation services and the
five per cent. of the net earnings, unless
the company choose to make payment by
some other mode, and TO limit the security
to the Government, provided in the fifth
section, to the prescribed methods of pay
ment. When the bill came into the Sen
ate, Senator Collamer pointed out this ef-
feet of these sections and insisted that, upon
this view, the proposed security for repay
ment was sham, and that there was du-
plicity in the bill. He therefore moved to
strike out the words which we have
italicized, supra, in the fifth section. The
amendment was agreed to, without debate,
and by hasty rUd U0ce vote. Gong
Globe, I'd sess. 37th Cong, PIP, 2S13, 2S14).
Senator Collamer seemed TO think that
the effect of his amendment was to REQUIRE
absolute repayment of the bonds. And
yet curiously enough he did not think, ap-
parently, that such repayment was posi-
BILE, and he did not expect it to be made.
We think he was mistaken in his opinion
OF the effect of the amendment. The pay
ment in the mode provided for in Section
9 was still the only payment required, and
the security in the fifth section still ap-
piled only to that mode of payment.
Senator Wilson, however. seemed to take
a similar view of the effect of the amend
ment to that entertained by Senator Cola
mer. A few minutes after its adoption,
therefore, be moved a reconsideration and
said;
make this motion because l am in favor OF
passing bill that will build a road. | shall
vote for the bill if the reconsideration is not
agreed to, but in my judgment this amend
ment will defeat the road. Instead of being
G security to the United States it is in nv
opinion. taking away security from the United
States. We propose to embark in building the
Pacific railroad. 1t is in the interest OF the
United states to induce the capital of this
country to go into that road. Every dollar put
into that road is so much security to the United
States. Every provision of this bill that pre-
vents the capitalists Of the country from putting
money into the road is so much against the
United States. If we embark IN this road and
put millions of dollars in it, we shall go
through with IT, if it costs tens of millions more
than you find in this bill The great object is to
make bill that shall bring into the road the
capital of the country, and in my judgment
this amendment repels capital. You provide in
the bill that the road shall do certain work for
the Government by way of payment carry the
mails, munitions of war, etc. You have Sc
curity in the bill that when the Secretary of
the treasury gives notice you can take
out these provisions. these guards, and
make it absolute that if this road cannot redeem
these bonds the road is forfeited and the Gov
eminent taxes possession There is not a man
IN America who VIII put dollar in the road
under such circumstances. / do net believe
there is dollar in the United States that will %
INTO that road with that provis0. And if there
be none what have you got? You have got nc
security; or if there be any, very little | be,
lieve it is the most fatal amendment that could
be adopted, and If it stands in that bill the bill
IS not worth the paper on which il is written
That is my Judgment in regard to the amend
ment, and therefore move the reconsideration
move 1t because ] want to make bill thai
Shall make road. / want so to frame the hill
as to induce capitalists of the country TO inyes
their money in the road to induce those who
have commercial interests. those who have rail
road interests, to see to it that this road is built
Every dollar we can bring into the road is SC
much contributed towards building the railroad
and is so much saved to the Treasury of the
United States. Gong. Globe, I'd session S7th
Cong, p. 2sl6)
Here We have the direct avowal of this
distinguished Senator, not only that he did
not expect repayment of the bonds except
in services, ETC., but also that he thought il
would be fatal to the enterprise to REQUIRE
payment III any other way and at all
events. In subsequent speech upon the
same motion he still more clearly voices
his idea. We have space only for a few
extracts from his remarks. He says:
feel 1t my duty 10 specially call the atten-
ton of the Senate to these amendments | have
very decided opinion upon them, and | be.
lieve them fatal TO this bill. do not entertain
the shade of a doubt upon the question This
bill provides n particular mode of repayment.
That mode is provided in the sixth section, on
the twelfth and thirteenth pages of the bin
Then why strike out the words as hereinafter
provided? Why is it necessary to change that
proviso? | see no necessity for it whatever
The Senator (Mr. Collamer) says the
bill goes upon the idea that the money that we
loan for building this road is to be repaid /
know that is the theory of the bill; but
there is not practical railroad man in the
country who expects the Government to get
back its money, unless the road can so manage
as to earn enough to pay it. When you consider
the length OF this rad. the mountains and the
deserts that 1t crosses the sparseiy settled POM
lation, the enormous cost of the road and of
running the road, the nation and the world
viii be satisfied if we can build il Mt a reason
able cost; and then II the road can pay the Gov
eminent the interest and keep on running and
do the business of the nation, and the CONNER
cial business of the country, everybody would
be delighted at the idea. l must say that fear
II cannot do all that. am very confident il
could no: without the liberal aid of the Govern
ment. not only in completing the road, but in
liberal dealing with the road when il is com
pleted | regard 1t as national necessity of
transcendant Importance, against which 49,
100000 or Sl00, 900 do not weigh ANYTHING
What are s75000.00o or SlO0,O00,OOO to the
American people 10 have q railroad completed
connecting the Atlantic and Pacific shores. and
opening the interior of the continent to this
nation? II is not even as dust in the balance
Gong. Globe. I'd sess, S7th Cong, p. 2sl7)
And after some further comments ON the
difficulty of the enterprise, the Senator
continues:
Right in view of all these facts we propose tn
drive hard bargain with the men who invest
their money in this road; and l tell you that
nine dollars out of ten that go into this road
will go into it to accomplish the result and not
with the idea of making money. There is not
man in this Senate who would put s. 900 in
that road with the idea of making a good in
vestment The road is a national necessity.
and yet We propose 10 put it in this shape: that
when the time comes. If the road fails to meet
its obligations, the Government is not to CON
try, hut ii is st once to take possession of the
road, and hold it on the part of the United
States. We do not want il anyway. The bill
provides that the Secretary of the Treasury can
do il; it is at the discretion, therefore of the
Government of the United States If
the road is TO burst if it fails to do what it can
do, the Government will unquestionably bring
the corporation up but 1t ought TO have tho.
privilege to regard their condition and their
necessities. j say. unless we are to deal liber-
ally with this road. 1 think we shall repel the
capital of the country from going into it. We
may begin TO ask too much, on the idea that
we are to give lands that are valuable, and put
some money in the road buta3 we embark in
this nation is going 10 put il through. Every
dollar EapD ont of ba nod l.-sl